Can you transfer a mortgage to a family member?

Can another family member take over a mortgage?

Yes, it’s possible for a family member to take over a mortgage, but they’ll need the lender’s approval. The new borrower will have to pass the lender’s eligibility criteria, which may include income checks, credit searches and deposit requirements.

Perfect for you: What is affordability?

It’s possible to add a family member or friend to the mortgage without adding them to the property itself, thanks to a joint borrower sole proprietor mortgage. We call it an Income Boost, for short, and we’ll talk about this in more detail later.

Alternatively, you could add a family member to your mortgage or let them take over the mortgage completely, while also passing ownership of the property over to them too. 

How do you transfer ownership of a house to a family member?

If you want to transfer the legal ownership of a property (with or without the mortgage) you’ll need to go through a formal legal process called a transfer of equity. This includes:

1. Getting consent from your mortgage lender (if there’s still a mortgage on the property)
2. Working with a solicitor or conveyancer to draft and register the transfer of ownership
3. Paying any applicable fees, legal costs or taxes, such as Stamp Duty or capital gains tax

A transfer of equity can be useful in the following situations: 

• The breakdown of a relationship. If you’re separating from your partner or spouse, you may wish to divide up your assets including your home.
• A new relationship. If you bought a house by yourself but you’re now in a serious relationship or married, a transfer of equity could add your partner or spouse to the deeds.
• Buying out the equity of a joint owner. If you have a joint mortgage with friends or family, a transfer of equity will allow you to buy them out. We talk about this in more detail in our How to buy someone out of a house guide.
• For tax purposes. Transferring equity to your children or other family members can be a tax-efficient way to manage your estate, but it’s really important that you speak to a financial advisor before going down this route.

Learn more: The essential guide to buying a house together

Do you pay Stamp Duty when transferring property to family?

Sometimes, yes. Stamp Duty may be due if the value of the transfer is over the current threshold of £125,000. However, you won’t have to pay Stamp Duty if the reason for the transfer is a divorce or dissolution of a civil partnership. However, Stamp Duty may be payable if a parent transfers a property to their child. 

Learn more: Can I add someone to my mortgage?

Alternatives to transferring a mortgage to a family member

If you’re struggling to afford your mortgage payments or you’re unable to remortgage due to strict affordability criteria, transferring a mortgage (or the entire property) to a relative is just one way to keep the home in the family. 

If this isn’t an option or it doesn’t make financial sense, there are other ways for family members to help each other buy a home or stay in their existing one.

Income Boost

An Income Boost lets homeowners or homebuyers add a family member to the mortgage, without adding them to the property itself. It’s a popular option among first-time buyers struggling to afford a home suitable for their needs, but it can also be useful for homeowners who are struggling with their repayments or wish to borrow more money against their existing home.

Deposit Boost

With a Deposit Boost, we can release some of the money tied up in your property and use the funds as a deposit for a family member. It's a particularly popular option for first-time buyers who are struggling to buy their own home, but have homeowning parents who wish to help. A Deposit Boost can help to unlock better mortgage rates or lower the new homebuyer’s Loan-to-Value (LTV).